Pennsylvania American applies for rate changes

By Staff Report

Wednesday, May 1, 2013

COATESVILLE – Pennsylvania American Water filed an application Tuesday with the Pennsylvania Public Utility Commission requesting an increase in monthly water bills and a decrease in sewer rates on billings.

If approved, water rates will by increase by $6.12 a month for a typical residential customer. The company’s request would bring a typical monthly residential water bill, using 3,960 gallons per month, to $58.63.

The increase rate for commercial customers using 22,000 gallons a month would increase from $231.57 to $254.10 per month. The increase for industrial customers using 475,600 gallons a month would increase from $3,602.78 to $3,840.67 per month.

In western Chester County, Pennsylvania American has 12,000 water and 5,800 wastewater customers in Coatesville, South Coatesville, East Fallowfield, Caln, West Caln, Valley, Sadsbury, West Sadsbury, Highland, West Brandywine and Parkesburg.

In northeastern Chester County and neighboring Montgomery County municipalities, the company has water-only customers in Spring City, East Vincent, West Vincent Schuylkill, Royersford, Limerick and Upper Providence.

Pennsylvania American Water President Kathy L. Pape said the primary reason for the rate request is due to the approximately $731 million that the company will have invested in system improvements since its last rate case in 2011. Those capital investments, which include upgrades to treatment plants, storage tanks, wells and pumping stations, are necessary to enhance service reliability, water quality and fire protection, officials said.

Pennsylvania American Water serves approximately 390 communities.

The company will also have replaced approximately 300 miles of aging pipe, as well as valves, service lines, hydrants and other parts of its nearly 10,100-mile network of water and sewer lines.

“This rate request is driven by the prudent capital investments that we’ve made to maintain and upgrade our infrastructure, so that we can ensure that our customers continue to receive reliable service that meets all regulatory standards,” said Pape. She served on the Governor’s Sustainable Water Infrastructure Task Force in 2008.

Last month, the American Society of Civil Engineers issued its latest report card on the nation’s water and wastewater infrastructure, and both received a “D” grade, officials said. If these critical issues are not addressed, Pape said, the result will be water disruptions, impediments to emergency response, damage to other types of infrastructure, as well as unsanitary conditions, increasing the likelihood of public health issues.

As the state’s aging infrastructure continues to fall into disrepair, Pape said Pennsylvania American Water’s capital investment is designed to address those challenges.

Pape said Pennsylvania American Water’s rates are based on the actual cost of providing water service. “To mitigate rate increases, we work very hard to control our costs and operate as efficiently as possible. In fact, we have reduced operating expenses since our last rate filing by increasing energy efficiency at our facilities while lowering chemical, fuel and maintenance costs,” she said.

In its application to the PUC, Pennsylvania American Water also requests adjustments to wastewater rates for customers who receive sewer service from the company. The changes affect approximately 17,000 wastewater customers in Coatesville, Claysville, Clarion and the Poconos region.

If the PUC approves the request of a decrease in wastewater rates, the typical customer’s wastewater bill for residential customers using 3,960 gallons a month would decrease from $67.50 to $47.63 per month. The proposed residential sewer rates would reduce costs by almost 30 percent, officials said.

The company’s filing requests that the new rates become effective June 29. However, the PUC typically suspends such requests for up to nine months to permit a complete investigation and analysis, which would be in January 2014.

Pennsylvania American Water is seeking a total annual revenue increase of approximately $58.6 million.